The US Air Force plans to retire the U-2 spy plane, left, and turn its mission over to the Global Hawk unmanned aircraft. (US Air Force (left); Northrop Grumman)

The Air Force’s plan to retire all of its U-2 spy planes and replace them with Global Hawk UAVs won’t save as much money as first promised, since the unmanned systems will need upgrades to handle the mission, according to experts and service data.

To upgrade Northrop Grumman’s Block 30 Global Hawk, the Air Force intends to invest “about $1.77 billion” over the next 10 years, said Maj. Gen. James Jones, deputy chief of staff for operations, plans and requirements. About $500 million of that is marked for a universal payload adapter that would allow U-2 sensors to be attached to the RQ-4 Global Hawk.

The Pentagon’s fiscal 2015 budget proposal submitted this month recommends retiring the U-2 fleet, which the Air Force has said will save about $2.2 billion. Subtract the $1.77 billion needed to upgrade the Global Hawk, and the savings drop to only $430 million.

The money is still significant, since it roughly covers funding the service’s Combat Rescue Helicopter program. But budget sequestration has forced the service to look for cuts “measured in billions rather than ‘just’ millions of dollars,” as Air Force testimony to Congress put it.

“I expect it will be a wash cost-wise, with a certain degree of risk in that capability gap,” said Richard Aboulafia, an aviation expert with the Teal Group. “That’s a short-term illusion of savings.”

The Air Force declined to comment on how much it would save overall, instead referring to a February speech by Secretary Deborah Lee James in which she laid out the argument for the retirement and mission swap.

“So part of the plan, and part of the savings we will achieve over time, will be plowed back into making the Global Hawk more on par with the U-2, and that will take a few years,” James said.

The two aircraft perform a similar high-altitude ISR (intelligence, surveillance and reconnaissance) mission. But as recently as February, service leaders argued that the Global Hawk does not meet the full capabilities of the U-2 at a higher cost, and that politics was behind the push to keep the Global Hawk.

(Page 2 of 5)

“Well, we are being driven by politics to take on a weapon system that is very expensive, the Global Hawk. It appears that I will be told I have to continue to purchase Global Hawks, and given the budget picture that we have, I cannot afford both the U-2 and the Global Hawk,” Gen. Michael Hostage, head of Air Combat Command, told Defense News in January before the fiscal 2015 budget was released earlier this month.

“I will likely have to give up the U-2. What that means is that we are going to have to spend buckets of money to get the Global Hawk up to some semblance of capability that the U-2 currently has,” he said. “It is going to cost a lot of money, and it is going to take time, and as I lose the U-2 fleet, I now have a high-altitude ISR fleet that is not very useful in a contested environment.

“It will change how I am able to employ that airplane in a high-end fight or a contested domain,” Hostage said. “But, again, politics in the end drives what we do, and if the politics say I am going to go with Global Hawk, then so be it, I go with Global Hawk. All of us will have to deal with the reduced capability that gives us.”

That argument has since flipped, with service officials saying the Global Hawk is cheaper to fly and can be upgraded to the capability of the U-2. Those upgrades involve sensors and weatherization.

“The things that we know we have to deal with to improve its capability [are weatherization], and get to where the [combatant commander] needs it on the regular basis,” Lt. Gen. Charles Davis, the service’s deputy for acquisition, said in February. “It can do that about half the time now. We have to work on that.

“And we have to know that when we need target-quality images and all the Global Hawk data, that we have that and we have it on a consistent basis,” Davis added. “Those will be two major areas that will be the focus of the investments in there.”

That involves moving the U-2’s optical bar camera, which takes 140-degree high-resolution photos, onto the Global Hawk. Despite being an older system, that camera has proven to be of high value to the service.

(Page 3 of 5)

Northrop spokeswoman Rene Freeland said the company is having “discussions on the best way forward” with those upgrades, but declined to comment further.

The Air Force intends to retire all of its U-2 spy planes in 2016, moving them into long-term storage. The timetable between the U-2’s retirement and the upgrading of the Global Hawk could present a capability gap, but Lt. Gen. Michael Moeller, deputy chief of staff for strategic plans and programs, argues there are other platforms that can help fill that need.

“You have to look across the [US military services] to make sure that we’ve got the capabilities, the high-altitude ISR capabilities, so that there’s no gap when the U-2 retires,” Moeller said. “We’ve done that. [The Office of the Secretary of Defense] and the Joint Staff has helped all of the services make sure that we’ve got the high-altitude capabilities.”

Moeller declined to say how the Pentagon would match that capability, but the secretive RQ-170 and RQ-180 unmanned systems would seem to fit the profile, as could enhanced satellite systems.

“They feel that looking at their ISR fleet as a whole, they have the capability to meet global demand and retire the U-2 on the schedule they have proposed,” said Rebecca Grant of IRIS Research. “They had to have looked at their entire ISR fleet, looked at what is required, and decided we’ll be OK.”

Retired Lt. Gen. David Deptula, former deputy chief of staff for ISR, was in the middle of the first Global Hawk versus U-2 debate in the late 2000s. He decided against divesting the U-2 then, citing cost and capabilities. But the situation has changed.

“The Global Hawk today is not Global Hawk of 2010,” Deptula said. “It’s not a perfect world and we’re faced with increased fiscal constraints, and given that, the current decision that the Air Force made is the correct one.

“It’s a hard decision,” Deptula added. “But with operating costs coming down below the U-2, given the multiple simultaneous sensors on Global Hawk and the persistence that it has, it’s the right choice.”

(Page 4 of 5)

“The Global Hawk is going to be a good system one day,” Aboulafia said. “There’s just a lot more to be said for keeping the U-2 right now.”

In making the announcement that the Global Hawk had won out, Pentagon officials were quick to point out that the cost per flying hour of Global Hawk had dropped below that of the U-2.

The service calculates cost per flying hour by taking the annual operational costs and dividing that by the number of hours flown in the fiscal year. Those operational costs include “mission personnel, unit-level consumption (fuel and reparable/consumable parts), intermediate maintenance, depot maintenance, contractor support, sustaining support and indirect support costs associated with the aircraft,” according to a service spokeswoman.

In other words, the more an aircraft flies, the lower the cost per flight. And those operational costs could be played with — hypothetically, if there are three different aircraft sharing a base and a runway needs to be repaired, a bookkeeper could move some extra repair costs to one aircraft instead of the other two.

That opacity makes cost per flying hour a questionable figure to use for fleet sizing, Grant said.

“Flying hour cost were never intended to be used as a fleet retirement analysis tool,” Grant said. “They are supposed to give you broad insight, but not to be parsed like this. Flying hour costs to me are apples and oranges with these two fleets, and not fit to compare.”

John Scott Winstead, part of Lockheed Martin’s U-2 business development unit and a former head of U-2 operations with the Air Force, argues that relying on different systems to cover for the U-2 could lead to increased costs that aren’t reflected in a cost-per-flying-hour total.

He also notes that Global Hawk takes longer to begin gathering data, which could add a “hidden cost” to flight time.

“There are targets the Global Hawk can’t reach because of the U-2’s superior altitude, so those would have to be offloaded to other platforms,” Winstead said. “So again on cost per flying hour, you can’t just go by that because it adds tasking to other platform.”

(Page 5 of 5)

Still, service officials seem confident they can continue to find savings in the Global Hawk program. Undersecretary Eric Fanning pointed to one major factor that could affect the cost.

“This is a great partnership with a contractor worried that perhaps we might not be able to support the Global Hawk any more,” Fanning said, noting that concern “has helped get the cost down.”

Future cost savings could be found in foreign military sales. While the US is the only operator of the U-2, South Korea intends to purchase four Global Hawks in the near future while Japan is reportedly considering a purchase.

“Obviously, it makes a huge difference if the systems are still in production; it reduces costs for everybody,” Davis said.

Of course, Congress could still scuttle the Air Force’s plans. Northrop’s large influence famously saved the Global Hawk in 2012 after the Air Force proposed canceling the Block 30 version of the UAV.

But Byron Callan, an analyst with Capital Alpha Partners, points out that the U-2 is less vital to Lockheed than the Global Hawk was for Northrop — and that a push to save the U-2 could result in the loss of funds for other Lockheed aircraft such as the F-35 or F-16 fighter jets

“Look at it from Lockheed as a whole,” Callan said. “Last time, you did not have the same sequester-type cuts. These sorts of fights could be finessed. It just seems it would be a little more risky for Lockheed to go out on a limb. ” ■